Transforming a Cafe’s Card Payments into Profit

Introduction

A Cuban Cafe Restaurant and vibrant local eatery, was facing a significant challenge: exorbitant credit card processing fees that were severely impacting its cash flow. With monthly charges amounting to over $2,000, the restaurant was struggling to meet its financial obligations, particularly rent. Florida Card Services (FCS) stepped in to provide a solution that not only alleviated this financial burden but also positioned the restaurant for long-term success.

Step 1: Identifying the Problem

El Rinconcito was experiencing a cash flow crisis due to excessive credit card processing fees imposed by its previous provider. The restaurant's owner was frustrated with the situation, as these fees were significantly eroding the business's profitability.

Step 2: Understanding the Client's Needs

The restaurant's primary need was to reduce credit card processing fees dramatically to improve cash flow. Additionally, the owner sought a solution that would not inconvenience customers but would shift the burden of card processing costs.

Step 3: Presenting the Solution

FCS proposed two options: the traditional approach of securing a lower processing rate and a more innovative method, the cash discount model. The latter involved passing the card processing fees onto customers or offering a discount for cash payments. Given the aggressive and unfair contract with the previous provider, FCS offered to cover the cancellation fee, demonstrating a commitment to the client's success.

Step 4: Implementing the Solution

After careful consideration, EL Rinconcito opted for the cash discount model. FCS implemented the necessary changes to the restaurant's payment system to facilitate the new approach.

Step 5: Measuring Results

Within a short period, EL Rinconcitoexperienced a significant reduction in credit card processing fees, saving over $2,000 per month. This translated to a 3% increase in the restaurant's overall revenue.

Step 6: Analyzing the Impact

By shifting the burden of card processing fees to customers, EL Rinconcito  was able to improve its profitability and cash flow. The cash discount model proved to be an effective strategy for mitigating the rising costs associated with card payments.

Step 7: Demonstrating ROI

The implementation of the cash discount model resulted in a substantial return on investment for this Cuban Cafe/Restaurant. The monthly savings of $2,000 represented a significant portion of the restaurant's overall revenue, allowing for reinvestment in the business, such as marketing, staff development, or menu enhancements.

Step 8: Building a Long-Term Partnership

FCS's commitment to the success of El Rinconcitoextended beyond the initial implementation. The company continued to provide support and guidance, ensuring the ongoing effectiveness of the cash discount model. This partnership has fostered a strong relationship built on trust and mutual benefit.

Conclusion

The case of El Rinconcito exemplifies the transformative power of the cash discount model in addressing the challenges posed by high credit card processing fees. By partnering with Florida Card Services, the restaurant achieved significant cost savings, improved cash flow, and positioned itself for sustained growth. This case study underscores FCS's expertise in providing tailored solutions to meet the unique needs of businesses in the hospitality industry.

Disclaimer: For privacy and confidentiality purposes, names have been omitted.